Prime Minister Scott Morrison led his conservative government to a surprise victory in Australia’s election Saturday, seeing off a challenge from the left-leaning Labor opposition with his pledge to safeguard the slowing economy.
Labor leader Bill Shorten said while there were still millions of votes to be counted, it was clear he would not be able to form a government.
“I wished Scott Morrison good fortune and good courage in the service of our great nation,” said Shorten, adding he will step down as Labor leader.
With 68 per cent of the vote counted, the Liberal-National coalition is expected to win 74 seats in the 151-member lower house, with Labor on 65, according to the Australian Broadcasting Corp. The broadcaster said it remained unclear whether the coalition would gain the 76 seats needed to form a majority.
It is a remarkable win for the conservative government, which has been plagued by factional infighting during its six years in office that hobbled its ability to craft policy. Morrison, 51, who took the helm in August and is the Liberals’ third leader in four years, spent much of the campaign relentlessly attacking Labor’s detailed policy platform that included boosting the minimum wage and taking tougher action against climate change.
The economic choice was what differentiated the parties at this election
He urged voters not to risk a change of government just when the economy — in its 28th year of uninterrupted growth — appears to be running out of steam.
“The economic story, the economic message, the economic choice was what differentiated the parties at this election,” Treasurer Josh Frydenberg said.
Morrison faces a drawn-out battle to legislate planned income tax cuts that could provide much-needed fiscal stimulus for the economy. His ability to do so will hinge on the makeup of the Senate, where populists and independents could hold the balance of power. Vote counting for the upper house will likely continue for days.
Morrison must also navigate the intensifying trade war between the U.S., Australia’s most important ally, and China, its biggest trading partner. The government must shore up ties with Beijing, which have been strained since the coalition last year introduced laws aimed at ending Chinese interference in national affairs, and barred telecommunications giant Huawei Technologies Co. from participating in its 5G network on security grounds.
Morrison closed down Labor’s lead during the five-week campaign, and a Newspoll published Saturday put the opposition just three points ahead. With the contest so tight, it was vital for both parties to hold or pick up seats held by a thin margin.
The battle in those districts was complicated by the growing support for populist, single-issue parties, which tapped into voter disaffection after a chaotic decade of infighting in both the mainstream parties led to six changes of prime minister since 2007. Labor lawmaker Brendan O’Connor said voting alliances between the government and minority parties had undercut Labour’s vote.
“We outlined a comprehensive plan,” he said. “The negative campaign against us has worked.”
Morrison’s conservatives picked up seats in the mainly rural states of Queensland and Tasmania and held ground elsewhere. Still, former Prime Minister Tony Abbott was an early casualty, losing his his formerly ultra-safe Sydney seat and ending his 25-year parliamentary career.
The coalition has been in office since 2013 and can boast a solid economic record over its two terms. The budget is on track to return to surplus next year after more than a decade of deficits. A hiring boom saw unemployment this year fall as low as 4.9 per cent compared with 5.7 per cent when it took office.
Australians are also being squeezed by record household debt
But a closer look reveals why many Australians simply feel they’re not reaping the spoils of the nation’s boom years. While company profits have soared more than 40 per cent since mid-2016, wages have grown at a snail’s pace — just 8 per cent.
Australians are also being squeezed by record household debt after homeowners leveraged themselves to the eyeballs during a five-year property boom that peaked in mid-2017. A subsequent slump in home values is now weighing heavily on household spending, the lifeblood of Australia’s economy.
The Reserve Bank of Australia, which has kept the benchmark interest rate at a record low 1.5 per cent since August 2016, is under pressure to cut again.
Shorten , who has led Labor since it lost office in 2013, focused on creating a “fairer society” with tax cuts aimed at the lower paid, and increased spending on hospitals, schools and childcare. Labor planned to pay for that in part by tightening tax concessions for stock market investors. He also planned to scale back tax incentives for property investors who helped fuel a housing boom that has priced many younger Australians out of the market.
The party also campaigned heavily on taking stronger measures to combat climate change and encourage renewable energy.
The progressive agenda left a big target for Morrison to attack — a strategy that appears to have worked.
With assistance from Michael Heath and Chris Bourke.